Liquidity ratios measure the company ability to meet its short-term obligations.
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- Statement of Comprehensive Income
- Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value (EV)
- Dividend Discount Model (DDM)
- Price to Operating Profit (P/OP) since 2007
- Price to Book Value (P/BV) since 2007
- Price to Sales (P/S) since 2007
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Liquidity Ratios (Summary)
Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
---|---|---|---|---|---|---|
Current ratio | ||||||
Quick ratio | ||||||
Cash ratio |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
- Current Ratio
- The current ratio exhibited fluctuating trends over the five-year period. Starting at 0.42 at the end of 2017, it decreased to its lowest point of 0.34 in 2018, before a slight recovery to 0.41 in 2019. A significant increase was observed in 2020, reaching 1.09, indicating improved short-term liquidity. However, this was followed by a decline to 0.76 in 2021, suggesting a partial reversal of the previous year's liquidity enhancement.
- Quick Ratio
- The quick ratio followed a pattern similar to the current ratio but consistently remained lower, reflecting the exclusion of inventory from liquid assets. It started at 0.27 in 2017, dipped to 0.22 in 2018, and then rose to 0.28 in 2019. In 2020, there was a notable increase to 0.97, implying enhanced ability to cover short-term liabilities with more liquid assets. By 2021, the ratio fell to 0.65, indicating a decrease in quick asset coverage relative to the prior year.
- Cash Ratio
- The cash ratio demonstrated a similar trajectory to the other liquidity measures, remaining the lowest among them as it exclusively accounts for cash and cash equivalents. It began at 0.14 in 2017, decreased to 0.10 in 2018, rebounded to 0.14 in 2019, and then saw a remarkable jump to 0.89 in 2020. This sharp increase highlights a substantial accumulation of cash or cash equivalents, possibly reflecting a strategic liquidity buffer. In 2021, the cash ratio declined to 0.54 but remained significantly higher than pre-2020 levels.
- Overall Analysis
- The liquidity ratios indicate a general pattern of constrained liquidity from 2017 through 2019, with all ratios below 0.5, suggesting limited short-term asset coverage relative to liabilities. The year 2020 marks a turning point with all three ratios rising markedly, reflecting a strengthened liquidity position likely in response to increased operational or market uncertainties. The subsequent decrease in 2021 ratios, although notable, still maintains liquidity levels above those before 2020, signifying cautious management of liquid resources post the sharp increase. This trend implies enhanced financial flexibility during and immediately following the disruptive year, followed by some reversion toward historical levels.
Current Ratio
Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | ||||||
Current assets | ||||||
Current liabilities | ||||||
Liquidity Ratio | ||||||
Current ratio1 | ||||||
Benchmarks | ||||||
Current Ratio, Competitors2 | ||||||
FedEx Corp. | ||||||
Uber Technologies Inc. | ||||||
Union Pacific Corp. | ||||||
United Airlines Holdings Inc. | ||||||
United Parcel Service Inc. | ||||||
Current Ratio, Sector | ||||||
Transportation | ||||||
Current Ratio, Industry | ||||||
Industrials |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Current ratio = Current assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Current Assets
-
The current assets experienced a decline from 2017 to 2018, falling from 7,844 million to 6,340 million US dollars. However, there was a notable increase in 2019 to 8,249 million, followed by a significant jump in 2020 reaching 17,404 million US dollars. In 2021, current assets slightly decreased to 15,940 million US dollars, yet remained substantially higher than the earlier years.
- Current Liabilities
-
Current liabilities hovered around similar levels from 2017 through 2019, with values of 18,573 million, 18,578 million, and 20,204 million US dollars respectively, indicating relative stability with a slight upward trend. In 2020, liabilities decreased to 15,927 million US dollars but surged significantly in 2021 to 20,966 million US dollars, representing the highest point within the five-year period.
- Current Ratio
-
The current ratio remained below 1.0 from 2017 through 2019, reflecting liquidity challenges with values of 0.42, 0.34, and 0.41 respectively. A marked improvement occurred in 2020, as the ratio rose sharply to 1.09, indicating stronger short-term liquidity and the ability to cover current liabilities with current assets. However, this positive trend reversed in 2021, where the ratio declined to 0.76, signaling a reduced but still improved liquidity position compared to the 2017-2019 period.
- Overall Insights
-
The data indicates volatility in the company's liquidity position over the five-year span. The sharp increase in current assets in 2020 could be linked to strategic financial adjustments or external factors impacting asset holdings. Despite a temporary improvement in liquidity ratios in 2020, the decline in 2021 suggests a return to tighter liquidity conditions. Concurrently, the increase in current liabilities in 2021 may imply increased short-term obligations or financing needs. Monitoring these fluctuations is essential for assessing the company's financial stability and operational resilience.
Quick Ratio
Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | ||||||
Cash and cash equivalents | ||||||
Short-term investments | ||||||
Accounts receivable, net of an allowance for uncollectible accounts | ||||||
Total quick assets | ||||||
Current liabilities | ||||||
Liquidity Ratio | ||||||
Quick ratio1 | ||||||
Benchmarks | ||||||
Quick Ratio, Competitors2 | ||||||
FedEx Corp. | ||||||
Uber Technologies Inc. | ||||||
Union Pacific Corp. | ||||||
United Airlines Holdings Inc. | ||||||
United Parcel Service Inc. | ||||||
Quick Ratio, Sector | ||||||
Transportation | ||||||
Quick Ratio, Industry | ||||||
Industrials |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
The financial data reveals significant fluctuations in the liquidity position over the analyzed five-year period.
- Total quick assets
- The total quick assets showed a decline from 5,016 million US dollars in 2017 to 4,082 million in 2018, followed by an increase to 5,736 million in 2019. A substantial rise was observed in 2020, reaching 15,492 million, before a slight reduction to 13,723 million in 2021. This pattern indicates a notable accumulation of highly liquid assets during the pandemic year.
- Current liabilities
- Current liabilities remained relatively stable from 2017 to 2018, at approximately 18,573 million and 18,578 million, respectively, and then increased to 20,204 million in 2019. A decline occurred in 2020, dropping to 15,927 million, followed by an increase to 20,966 million in 2021. This variability suggests fluctuating short-term obligations, with a significant reduction in 2020 likely due to operational changes or restructuring during that period.
- Quick ratio
- The quick ratio hovered below 0.3 from 2017 to 2019, indicating limited immediate liquidity relative to current liabilities during these years. A marked improvement is visible in 2020, with the ratio rising sharply to 0.97, reflecting considerably enhanced liquidity. However, the ratio decreased to 0.65 in 2021, signaling a reduction in liquid assets relative to current liabilities compared to the previous year but still considerably higher than the pre-2020 levels.
Overall, the data shows a trend of constrained liquidity prior to 2020, with a significant boost in quick assets and liquidity ratios during 2020, likely as a response to extraordinary circumstances. This improvement in immediate liquidity was partially reversed in 2021, though the company maintained a healthier quick ratio than in the years before 2020.
Cash Ratio
Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | ||||||
Cash and cash equivalents | ||||||
Short-term investments | ||||||
Total cash assets | ||||||
Current liabilities | ||||||
Liquidity Ratio | ||||||
Cash ratio1 | ||||||
Benchmarks | ||||||
Cash Ratio, Competitors2 | ||||||
FedEx Corp. | ||||||
Uber Technologies Inc. | ||||||
Union Pacific Corp. | ||||||
United Airlines Holdings Inc. | ||||||
United Parcel Service Inc. | ||||||
Cash Ratio, Sector | ||||||
Transportation | ||||||
Cash Ratio, Industry | ||||||
Industrials |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= ÷ =
2 Click competitor name to see calculations.
- Total cash assets
- The total cash assets exhibited variability over the analyzed periods. Starting at $2,639 million at the end of 2017, there was a decline in 2018 to $1,768 million. This was followed by an increase in 2019 to $2,882 million. A significant surge is observed in 2020, with cash assets peaking at $14,096 million, which then decreased to $11,319 million in 2021. Overall, the trend indicates a substantial increase in liquidity during 2020, potentially reflective of strategic cash retention or capital raising during that year, with a slight decline thereafter.
- Current liabilities
- Current liabilities remained relatively stable between 2017 and 2019, ranging from $18,573 million to $20,204 million. In 2020, there was a notable reduction to $15,927 million, followed by a significant increase to $20,966 million in 2021, the highest level in the given time frame. This pattern suggests a temporary reduction in short-term obligations in 2020, possibly in response to external factors, before returning to an elevated level in 2021.
- Cash ratio
- The cash ratio, which measures liquidity by comparing cash assets to current liabilities, reflects the changes in both cash and liabilities. It declined from 0.14 in 2017 to 0.10 in 2018, returning to 0.14 in 2019. A marked increase occurred in 2020, with the cash ratio reaching 0.89, indicating a strong liquidity position during that year. In 2021, the ratio moderately decreased to 0.54 but remained significantly higher than the pre-2020 levels. This analysis highlights enhanced liquidity reserves in 2020 and 2021 compared to prior years, suggesting improved capacity to meet short-term liabilities.